Stream-dwelling aquatic insects represent a highly interesting group for studying evolutionary processes. In our project we selected the mountain-dwelling subfamily Drusinae (Trichoptera) with over 80 species – most being European micro-endemics - as our model group. By generating multi-locus sequence data and using state of the art phylogenetic reconstruction methods we will infer the first extensive lower rank molecular phylogeny in caddisflies. Based on the molecular phylogeny we will investigate the modes of lineage divergence and gene evolution, and examine tree topology to infer if diversity results from radiations or continuous lineage splitting. Likelihood based modelling will allow us to test for neutral, positive and purifying selection in protein coding sequence data.Using novel Bayesian methods for ancestral character state reconstructions and divergence time estimates, we will relate our findings with Cenozoic climate reconstructions, to examine the underlying evolutionary processes and formulate hypotheses on how climate change influences diversification in aquatic insects. For the first time in aquatic insects we will examine shifts in eco-space within the group using state of the art Bayesian ancestral character state reconstruction and novel approaches for linking ecological history with phylogenetic diversification.